THE  TREASURY  NOTE  BILL. 


J 


SPEECH 

OF 

HON.  TIIADDEUS  STEVENS- 

OF  PENNSYLVANIA. 

/ 

- o - 

Delivered  in  the  House  of  Representatives,  February  6,  1862. 


The  House  beinq;  in  Committee  of  the  Whole  on  the  state 
of  the  Union,  on  the  bill  to  authorize  the  issue  of  Uuitcd  States 
Treasury  notes — 

Mr.  STEVENS  said: 

Mr.  Chairman  :  This  bill  is  a  measure  of 
necessity,  not  of  choice.  No  one  would  will¬ 
ingly  issue  paper  currency  not  redeemable  on 
demand  and  make  it  a  legal  tender.  It  is  never 
desirable  to  depart  from  that  circulating  me¬ 
dium  which,  by  the  common  consent  of  civil¬ 
ized  nations,  forms  the  standard  of  value.  But 
it  is  not  a  fearful  measure  ;  and  when  rendered 
necessary  by  exigencies,  it  ought  to  produce  no 
alarm. 

The  first  inquiry  then,  is,  is  this  measure 
necessary  ?  The  late  Administration  left  a 
debt  of  about  one  hundred  millions  of  dollars. 
It  bequeathed  us  also  an  expensive  and  for¬ 
midable  rebellion.  This  compelled  Congress, 
at  its  extra  session,  to  authorize  a  loan  of 
$250,000,000— $100,000,000  of  these  were  taken 
at  seven  and  three-tenths  per  cent.,  and  $50,- 
000,000  of  six  per  cent,  bonds  at  a  discount  of 
over  five  millions  of  dollars ;  $50,000,000  were 
used  in  demand  notes  payable  in  coin,  leaving 
$50,000,000  undisposed  of.  Before  the  banks 
had  paid  much  of  the  last  loan  they  broke  down 
under  it,  and  suspended  specie  payments. 
They  have  continued  to  pay  that  loan,  not  in 
coin,  but  in  demand  notes  of  the  Government — 
that  has  kept  them  at  par.  But  the  last  of  that 
loan  was  paid  yesterday ;  and  on  the  same  day 
the  banks  refused  to  receive  them.  They  must 
-now  sink  to  depreciated  currency.  The  re¬ 
maining  $50,000,000  the  Secretary  of  the 
Treasury  has  been  unable  to  negotiate.  A  small 


portion  of  it,  say  ten  millions,  has  been  issued 
at  seven  and  three-tenths  in  payment  of  debts. 

All  this  has  been  used  ;  and  there  is  now  a 
floating  debt,  audited  and  unaudited,  of  at  least 
$150,000,000.  The  Secretary  intended  to  use 
the  balance  of  the  authorized  loan  by  paying 
it  out  to  creditors  in  notes  of  seven  and  three- 
tenths;  that  becoming  known  they  immediate¬ 
ly  sunk  four  per  cent.,  and  if  he  had  persevered 
it  is  believed  they  would  have  run  down  to  ten 
per  cent,  discount.  But  even  if  these  could  be 
used  (about  forty  millions)  there  would  remain 
due  about  ninety  millions,  the  payment  of 
which  is  urgently  demanded.  The  daily  ex¬ 
penses  of  the  Government  are  now  about  two 
millions.  To  carry  us  on  till  the  next  meeting 
of  Congress  would  take  $500,000,000  more, 
making,  before  legislation  could  be  had  at  next 
session,  about  seven  hundred  millions  of  dol¬ 
lars  to  be  provided  for.  We  have  already  ap¬ 
propriated  $550,000,000 — making  our  entire 
debt  $1,100,000,000. 

The  grave  question  is,  how  can  this  large 
amount  be  raised  ?  The  Secretary  of  the 
Treasury  has  used  his  best  efforts  to  negotiate 
a  loan  of  but  $50,000,000,  and  has  failed.  Sev¬ 
eral  modes  of  relief  have  been  suggested  ;  the 
most  obvious  is  to  borrow  on  Government  bonds, 
bearing  an  interest  of  six  per  cent.  That  it  is 
known  can  only  be  effected  by  putting  the 
bonds  into  the  market  to  the  highest  bidder. 
If  but  a  small  sum  were  wanted  it  might  pro¬ 
bably  be  had  at  a  small  discount.  But  if  suffi¬ 
cient  to  meet  our  wauts  up  to  next  December, 
or  $700,000,000,  were  forced  into  the  market, 


2 


\ 


as  it  is  wanted,  I  have  no  doubt  they  would  sell 
as  low  as  sixty  per  cent.,  as  in  the  last  English 
war  ;  and  even  then  it  would  be  found  impossi¬ 
ble  to  find  payment  in  coin.  A  large  part  of 
it  must  be  accepted  in  the  depreciated  notes  of 
non-specie-paying  banks,  for  I  suppose  no  one 
expects  the  resumption  of  specie  payments  un¬ 
til  the  war  shall  be  ended.  But  as  this  Con¬ 
gress  must  provide  for  appropriations  to  the 
end  of  the  fiscal  year  1863,  seven  months  more 
must  be  added  to  these  expenses.  That  would 
require  $420,000,000  added  to  these  $700,000,- 
000  before  estimated,  and  the  aggregate  would 
be  $1,100,000,000.  The  discount  on  that  sum 
at  forty  per  cent,  would  be  $440,000,000.  At 
the  minimum  discount  that  any  reasonable  man 
could  fix,  say  twenty-five  per  cent.,  it  would  be 
$275,000,000.  It  would,  therefore,  require  at 
least  bonds  to  the  amount  of  $1,500,000,000  to 
produce  sufficient  currency  to  make  $1,100,- 
000,000,  and  carry  us  to  the  end  of  the  next 
fiscal  year.  This  sum  is  too  frightful  to  be  tol¬ 
erated. 

Certain  bankers  have  suggested  that  the  im¬ 
mediate  wants  of  the  Government  might  be 
supplied  by  pledging  seven  and  three-tenths 
per  cent,  bonds  with  a  liberal  margin,  payable 
in  one  year,  to  the  banks,  who  would  advance  a 
portion  in  gold  and  the  rest  in  currency.  The 
effect  would  be  that  Government  would  pay  out 
to  its  creditors  the  depreciated  notes  of  non¬ 
specie-paying  banks.  And  as  there  is  no  pro¬ 
bability  that  the  pledges  would  be  redeemed 
when  due,  they  would  be  thrown  into  the  mar¬ 
ket  and  sold  for  whatever  the  banks  might 
choose  to  pay  for  them.  The  folly  of  this 
scheme  needs  no  illustration. 

Another  is  to  strike  out  the  legal  tender 
clause,  and  make  them  receivable  for  all  taxes 
and  public  dues ;  but  it  is  not  proposed  to  make 
any  provision  for  redeeming  them  in  coin  on 
demand.  I  do  not  believe  that  such  notes 
would  circulate  anywhere  except  at  a  ruinous 
discount.  No  notes  not  redeemable  on  demand, 
and  not  made  a  legal  tender ,  have  ever  been 
kept  at  par.  Even  those  who  could  use  them 
for  taxes  and  duties  would  discredit  them,  that 
they  might  get  them  low.  If  soldiers,  mechan¬ 
ics,  contractors,  and  farmers,  were  compelled 
to  take  them  from  the  Government,  they  must 
*  submit  to  a  heavy  shave  before  they  could  use 
them.  The  knowledge  that  they  were  pro¬ 
vided  for  by  taxation,  and  would  surely  be 


paid  twenty  years  hence,  would  not  sustain 
them. 

The  Secretary  of  the  Treasury,  in  his  report, 
recommended  a  scheme  to  produce  a  uniform 
national  currency,  and  furnish  a  market  for 
Government  bonds.  It  proposes  that  the  banks 
shall  receive  their  circulation  from  the  Govern¬ 
ment  to  the  amount  of  Government  bonds 
pledged  with  the  Treasury  for  their  security; 
and  that  no  more  notes  should  be  issued  than 
the  par  value  of  such  bonds,  and  should  be  re¬ 
deemed  by  the  banks.  As  a  general  system  of 
banking  in  ordinary  times,  it  might  be  very 
useful  in  regulating;  the  currency,  and  by  the 
sale  of  the  bonds  the  Government  might  com¬ 
mand  coin.  But  while  the  banks  are  in  sus¬ 
pension,  it  is  not  easy  to  see  how  it  would  re¬ 
lieve  the  Government.  If  the  notes  were  pro¬ 
cured,  it  must  be  by  accepting  payment  by  the 
Government  in  depreciated  circulation.  How 
would  that  be  any  better  than  the  Govern¬ 
ment’s  own  notes  ?  The  security  of  the  Gov¬ 
ernment  is  equal  to  that  of  the  banks,  and 
would  give  as  much  currency.  To  the  banks  I 
can  see  its  advantage.  They  would  have  the 
whole  benefit  of  the  circulation  without  inter¬ 
est,  and  at  the  same  time  would  draw  interest 
on  the  Government  bonds  from-  the  time  they 
got  the  notes.  Now,  it  is  very  plain  that,  if  the 
United  States  issued  those  notes  direct,  they 
would  have  the  benefit  of  the  whole  circulation. 
In  other  words,  it  would  be  equal  to  a  loan, 
without  interest,  to  the  full  amount  of  the  cir¬ 
culation.  This  project,  therefore,  however  de¬ 
sirable  as  a  banking  system,  could  afford  no 
immediate  relief,  especially  as  it  would  afford 
no  sale  for  additional  bonds,  as  the  banks  have 
already  as  many  as  would  form  the  basis  of 
their  operations.  Having,  as  I  think,  shown 
the  impossibility  of  carrying  on  the  Govern¬ 
ment  in  any  other  way,  let  us  briefly  notice 
some  of  the  objections  to  it.  First,  is  it  con¬ 
stitutional  ? 

The  power  to  emit  bills  of  credit  and  make 
them  a  legal  tender  is  nowhere  expressly  given 
in  the  Constitution  ;  but  it  is  known  that  but 
few  of  the  acts  which  Government  can  perform 
are  specified  in  that  instrument.  It  would  re¬ 
quire  a  volume  larger  than  the  Pandects  of 
Justinian  or  the  Code  Napoleon  to  make  such 
enumeration,  whereas  our  Constitution  has  but 
a  few  pages.  But  everything  necessary  to  car¬ 
ry  out  the  granted  powers  of  the  Government 


3 


is  not  only  implied  but  expressly  given  to  Con¬ 
gress.  If  nothing  could  be  done  by  Congress 
except  what  is  enumerated  in  the  Constitution, 
the  Government  could  not  live  a  week. 

The  States  are  prohibited  from  making  any¬ 
thing  but  “gold  and  silver  coin  a  tender  in  the 
payment  of  debts  ;”  but  such  prohibition  does 
not  extend  to  Congress.  Th$  Constitution  is 
silent  as  to  the  power  of  Congress  oyer  that 
subject.  The  whole  question  of  the  right  to 
emit  bills  of  credit  by  Congress  was  considered 
in  the  convention  that  framed  the  Constitution. 
It  was  reported  as  a  part  of  the  power  to  “bor¬ 
row  money.”  It  was  objected  to  as  tending  to 
make  paper  a  currency  with  legal  tender,  and 
and  a  motion  was  made  to  strike  it  out  and  in¬ 
sert  an  express  prohibition.  That  was  resisted, 
because,  as  Mr.  Mason  said,  “it  could  not  be 
foreseen  what  the  necessities  of  the  Govern¬ 
ment  rdight  at  some  time  require.”  “The  late 
war,”  he  said,  “could  not  have  been  carried  on 
had  such  prohibition  existed.”  It  was  finally 
agreed  to  strike  out  the  express  power,  and 
not  to  insert  the  prohibition,  leaving  it  to  the 
exigencies  of  the  times  to  determine  it3  neces¬ 
sity.  The  right  to  emit  bills  of  credit,  which 
the  convention  expressly  refused  to  grant  as  a 
substantive  power,  has  for  fifty  years,  by  the 
common  consent  of  the  nation,  been  practiced, 
and  is  now  conceded  by  every  opponent  of  this 
bill.  With  what  grace  can  the  concomitant 
power  to  make  them  a  legal  tender  be  objected 
to?  The  Supreme  Court  have  settled  certain 
principles  with  regard  to  the  power  of  Congress 
over  measures  not  expressly  enumerated  in  the 
Constitution.  The  principle  is,  that  where  any 
thing  is  neoessary  to  carry  into  effect  the  grant 
ed  power  it  is  constitutional.  The  eighth  sec¬ 
tion  of  the  first  article  of  the  Constitution  gives 
Congress  power — 

“To  make  all  laws  which  may  be  necessary 
and  proper  to  carry  into  execution  the  forego¬ 
ing  powers,  and  all  other  powers  vested  by  this 
Constitution  in  the  United  States  or  in  any  de¬ 
partment  or  officer  thereof.” 

The  Constitution  nowhere  gives  Congress 
power  to  create  corporations  or  to  establish  a 
bank  of  the  United  States.  Bat  as  Congress 
had  power  to  regulate  commercs,  and  to  regu¬ 
late  the  value  of  coin,  and  it  deemed  the  estab¬ 
lishment  of  a  bank  necessary  to  effectuate  those 
powers,  the  Supreme  Court  pronounced  it  con¬ 
stitutional.  In  short,  whenever  any  law  is 
necessary  and  proper  to  carry  jnto  exectution 


any  delegated  power,  such  law  is  valid.  The 
necessity  need  not  be  absolute,  inevitable,  and 
overwhelming — if  it  be  useful,  expedient,  profit¬ 
able,  the  necessity  is  within  the  constitutional 
meaning.  Whether  such  necessity  exists  is 
absolutely  for  the  decision  of  Congress.  Their 
judgment  is  absolute  and  conclusive.  If  Con¬ 
gress  should  decide  this  measure  to  be  neces¬ 
sary  to  a  granted  power,  no  department  of  the 
Government  can  rejudge  it.  The  Supreme 
Court  might  think  the  judgment  of  Congress 
erroneous,  but  they  could  not  review  it.  Now, 
it  is  for  Congress  to  determine  whether  this 
bill  is  necessary  “  to  raise  and  support  armies 
and  navies,  to  borrow  money,  and  provide  for 
the  general  welfare.”  They  are  all  granted 
powers.  It  is  for  those  who  think  that  it  is  not 
“  necessary ,  useful ,  proper,”  to  propose  some 
better  means,  and  vote  against  this ;  if  a  ma¬ 
jority  think  otherwise,  its  constitutionality  is 
established. 

If  constitutional,  is  it  expedient  ?  It  is  ob¬ 
jected  by  the  gentleman  from  Ohio  that  the 

legal  tender  clause  would  depreciate  the  notes. 
All  admit  the  necessity  of  the  issue.  But  some 
object  to  their  being  made  money.  It  is  not 
easy  to  perceive  how  notes  issued  without  being 
made  immediately  payable  in  specie  can  be 
made  any  worse  by  making  them  a  legal  tender. 
And  yet  that  is  the  whole  argument  so  far  as 
expediency  is  concerned.  Other  gentlemen 
argued  that  this  would  impair  contracts  by 
making  a  debt  payable  in  other  money  than 
that  which  existed  at  the  time  of  the  contract, 
and  would  so  be  unconstitutional.  Where  do 
gentlemen  find  any  prohibition  on  Congress 
against  passing  laws  impairing  contracts? 
There  is  none,  though  it  would  be  unjust  to  do 
it.  But  this  impairs  no  contract.  All  con¬ 
tracts  are  made  not  only  wit  h  a  view  to  present 
laws,  but  subject  to  the  future  legislation  of  the 
country.  We  have  more  than  once  changed 
the  value  of  coin.  Neither  our  gold  nor  silver 
coin  is  as  valuable  as  it  was  fifty  years  ago. 
Congress  in  1853,  I  believe,  regulated  the 
weight  and  value  of  silver.  They  debased  it 
over  seven  per  cent.,  and  made  it  a  legal  ten¬ 
der.  Who  ever  pretended  that  that  was  un¬ 
constitutional  ?  The  gentlemen  from  Vermont 
[Mr.  Morrill]  and  Ohio  [Mr.  Pendleton] 
think  it  an  ex  post  facto  law.  It  is  not  won¬ 
derful  that  my  distinguished  colleague,  not 
being  a  professional  lawyer,  should  not  bo  awa/e 


that  the  ex  post  facto  laws  prohibited  by  the 
Constitution  refer  only  to  crimes  and  misde. 
meanors,  and  not  to  civil  contracts.  The  gentle¬ 
man  from  Ohio  no  doubt  knew,  but  forgot  it. 

It  is  said  that  this  will  inflate  the  currency, 
and  thus  raise  the  price  of  commodities  and 
stimulate  speculation.  How  do  gentlemen  ex¬ 
pect  that  using  the  same  amount  of  notes  with¬ 
out  the  legal  tender  will  inflate  it  less  ?  It  will 
take  the  same  amount  of  millions,  with  or  with¬ 
out  the  legal  tender,  to  carry  on  the  war,  ex¬ 
cept  that  the  one  would  be  below  par  and  the 
other  at  par.  No  instance  can  be  given  of  a 
currency  not  redeemable  on  demand  in  gold 
that  did  not  immediately  depreciate.  But  if 
made  a  legal  tender,  and  not  a  redundancy 
of  it  emitted,  it  will  be  par.  I  fear  gentlemen 
have  not  well  consulted  standard  writers  on  this 
subject,  but  have  substituted  their  own  fancy 
and  wild  declamation. 

McCulloch,  one  of  the  most  learned  of  writ¬ 
ers  on  that  subject,  says  : 

“But  though  the  condition  that  they  shall  be 
paid  on  demand,  with  the  belief  that  this  con¬ 
dition  shall  be  complied  with,  will  be  necessary 
to  sustain  the  value  of  notes  issued  by  private 
parties  or  associations,  it  is  not  necessary  to 
sustain  the  value  of  paper  money,  properly  so 
called,  or  of  notes  which  have  been  made  a  legal 
tender.  The  only  thing  required  to  sustain 
the  value  of  the  latter  description  of  currency 
is  that  it  should  be  issued  in  limited  quantities. 

“Every  country  has  a  certain  number  of  ex¬ 
changes  to  make ;  and  whether  these  are  af¬ 
fected  by  the  employment  of  a  given  number 
of  coins  of  a  particular  denomination,  or  by  the 
employment  of  the  same  number  of  notes  of 
the  same  denomination,  is,  in  this  respect,  of 
no  importance  whatever.  Notes  which  have 
been  made  legal  tender,  and  are  not  payable 
on  demaud,  do  not  circulate  because  of  any 
confidence  placed  in  the  capacity  of  the  issuers 
to  retire  them  ;  neither  do  they  circulate  be¬ 
cause  they  are  of  the  same  real  value  as  the 
commodities  for  which  they  are  exchanged  ; 
but  they  circulate  because,  having  been  select¬ 
ed  to  perform  the  functions  of  money ,  they  are, 
as  such,  readily  received  by  all  individuals  in 
payment  of  their  debts.  Notes  of  this  descrip¬ 
tion  may  be  regarded  as  a  sort  of  tickets  or 
counters  to  be  used  in  computing  the  value  of 
property,  and  in  transferring  it  from  one  indi¬ 
vidual  to  another.  And  as  they  are  nowise 
affected  by  fluctuations  of  credit,  their  value,  it 
is  obvious,  must  depend  entirely  on  the  quanti¬ 
ty  of  them  in  circulation  as  compared  with  the 
payments  to  be  made  through  their  instrumen¬ 
tality,  or  the  business  they  have  to  perform. ” 

The  value  of  legal  tender  notes  depends  on 


4 

the  amount  issued  compared  with  the  business 
of  the  country.  If  a  less  quantity  were  issued 
than  the  usual  and  needed  circulation  they 
would  be  more  valuable  than  gold. 

The  same  author  says  : 

“  By  reducing  the  supply  of  notes  below  the 
supply  of  coin  that  would  circulate  in  their 
place  where  they  withdrawn  their  value  maybe 
raised  above  the  value  of  gold,  while  by  in¬ 
creasing  them  to  a  greater  extent  it  is  propor¬ 
tionally  lowered.”  *  *  *  *  “  There 

cannot,  however,  be  the  least  difference,  as 
respects  value,  in  the  provinces,  between  Bank 
of  England  paper,  now  that  it  is  legal  tender, 
and  gold.” 

Mr.  THOMAS,  of  Massachusetts.  I  desire 
to  ask  the  gentleman  a  question  in  connection 
with  that  passage.  McCulloch  laid  down  the 
doctrine  that  the  paper  is  limited  to  the  amount 
necessary  for  currency.  Let  me  ask  the  gen¬ 
tleman  from  Pennsylvania  whether  he  now  ex¬ 
pects,  in  managing  these  financial  matters,  to 
limit  the  amount  of  these  notes  to  $150,000,000  ? 
Is  that  his  expectation  ? 

Mr.  STEVENS.  It  is.  I  expect  that  is  the 
maximum  amount  to  be  issued. 

Mr.  THOMAS,  of  Massachusetts.  You  do 
not  expect  to  call  for  any  more  ? 

Mr.  STEVENS,  No,  sir;  I  do  not. 

Increase  gold  and  silver  beyond  the  amount 
needed,  and  you  depreciate  its  value.  Such  in¬ 
flation  of  the  currency  is  just  as  injurious  as  if 
it  were  in  paper,  so  far  as  raising  prices  and 
stimulating  speculations  are  concerned. 

I  know  the  danger  of  granting  to  irrespon¬ 
sible  institutions  or  individuals  the  right  to 
issue  paper  currency  not  immediately  conver¬ 
tible,  because  their  avarice  would  always  abuse 
the  privilege  and  over  issue.  But  when  the 
Government  thus  issues,  the  fault  and  the 
crime  is  theirs  if  they  do  not  restrain  it  within 
proper  bounds.  Is  the  proposed  issue  of 
$150,000,000  too  much?  It  is  believed  that 
the  ordinary  business  of  the  country,  especially 
now,  requires  a  circulation  of  $400,000,000. 
The  bauk  circulation  has  been  about  $200,- 
000,000,  with  coin  to  the  amount  of  $250,- 
000,000.  The  bank  paper,  now  in  suspension, 
would  largely  disappear  before  this  par  paper ; 
and  during  suspension,  which  mean3  during 
the  war,  there  will  be  but  little  coin  circulation. 
If  the  whole  $150,000,000  of  United  States 
notes  could  be  kept  circulating,  I  do  not  think 
the  surviving  bank  paper  would  furnish  a  suf¬ 
ficient  currency  for  commercial  purposes — 


N 


some  coin  must  be  added.  But  it  is  not  prob¬ 
able  that  it  could  all  be  kept  out ;  much  would 
rest  in  banks,  in  the  pockets  of  private  in 
dividuals,  or  await  investment  temporarily. 

But  my  distinguished  colleague  from  Ver¬ 
mont  fears  that  enormous  issues  would  follow 
to  supply  the  expenses  of  the  war.  I  do  not 
think  any  more  would  be  needed  than  the  $150,- 
000,000.  The  notes  bear  no  interest.  No  one 
would  seek  them  for  investment.  In  the  rapid 
circulation  of  money,  $100  in  a  year  is  turned 
so  often  as  to  purchase  ten  times  its  value.  This 
money  would  soon  lodge  in  large  quantities 
with  the  capitalists  and  banks,  who  must  take 
them.  But  the  instinct  of  gain,  perhaps  I  may 
call  it  avarice,  would  not  allow  them  to  keep  it 
long  unproductive.  A  dollar  in  a  miser’s  safe 
unproductive  is  a  sore  disturbance.  Where 
could  they  invest  it  ?  In  United  States  loans 
a  six  per  cent.,  redeemable  in  gold  in  twenty 
years,  the  best  and  most  valuable  permanent 
investment  that  could  be  desired.  The  Gov¬ 
ernment  would  thus  again  possess  such  notes 
iu  exchange  for  bonds,  and  again  reissue  them. 

have  no  doubt  that  thus  the  $500,000,000  of 
bonds  authorized  would  be  absorbed  in  less 
time  than^  would  be  needed  by  Government : 
and  thus  $150,000,000  would  do  the  work  of 
$500,000,000  of  bonds.  When  further  loans 
are  wanted,  you  need  only  authorize  the  sale  of 
more  bonds;  the  same  $150,000,000  of  notes 
will  be  ready  to  take  them. 

I  contend  that  this  currency  will  be  better 
than  any  this  country  can  produce.  Bank 
notes  are  merely  local.  The  holder  of  them  in 
bt.  Louis,  wishing  to  transmit  to  New  York,  must 
pay  a  discount  of  from  one  to  ten  per  cent.  If 
he  has  gold,  the  cost  of  transportation  is  consid- 
era  e.  If  he  travel,  it  is  cumbersome.  But  if 

he  has  United  States  par  notes,  he  can  send 
them  without  cost  all  over  the  Union. 

Gentlemen  are  clamorous  in  favor  of  those 
who  have  debts  due  them,  lest  the  debtor  should 
the  more  easily  pay  his  debt.  I  do  not  much 
sympathize  with  such  importunate  money-lend¬ 
ers.  But  widows  and  orphans  are  introduced 
n  tears,  lest  their  estates  should  be  badly 
n vested..  I  pity  no  one  who  has  his  money 
nvested  in  United  States  bonds,  payable  in  gold 
a  twenty  years,  with  interest  semi-annually. 

But  while  these  men  have  agonized  bowels 
ver  the  rich  man’s  case,  they  have  no  pity  for 
le  poor  widow,  the  suffering  soldier,  he 


wounded  martyr  to  his  country’s  good,  who 
must  receive  these  notes  without  legal  tender 
or  nothing,  and  who  must  give  half  of  it  to  the 
Shylocks  to  get  the  necessaries  of  life.  Sir,  I 
wish  no  injury  to  any,  nor  with  our  bill  could 
any  happen ;  but  if  any  must  lose,  lei  it  not  be 
the  soldier,  the  mechanic,  the  laborer,  and  the 
farmer. 

Let  me  restate  the  various  projects.  Ours 
proposes  United  States  notes,  secured  at  the 
end  of  twenty  years  to  be  paid  in  coin,  and  the 
interest,  raised  by  taxation,  semi-annually ;  such 
notes  to  be  money,  and  of  uniform  value 
throughout  the  Union.  No  better  investment, 
in  my  judgment,  can  be  had  ;  no  better  cur¬ 
rency  can  be  invented. 

The  amendment  of  the  gentleman  from  Ohio 
[Mr.  \  allandigham]  proposes  the  same  issue 
of  notes,  but  objects  to  a  legal  tender  ;  but  does 
not  provide  for  their  redemption  on  demand  in 
coin.  He  fears  our  notes  would  depreciate. 
Let  him  who  is  sharp  enough  to  see  it  instruct 
me  how  notes  that  every  man  must  take  are 
worth  less  than  the  same  notes  that  no  man 
need  take,  and  few  would,  being  irredeemable 
on  demand.  But  he  doubts  its  constitutional¬ 
ity.  He  who  admits  our  power  to  emit  bills  of 
credit,  nowhere  expressly  authorized  by  the 
Constitution,  is  a  sharp  and  unreasonable 
doubter  when  he  denies  the  -power  to  make 
them  a  legal  tender. 

ri’he  proposition  of  the  gentleman  from  New 
York  [Mr.  Rgscoe  Conkling]  authorizes  the 
issuing  of  seven  per  cent,  bonds,  payable  in 
thirty-one  years,  to  be  sold  ($250,000,000  of  it) 
or  exchanged  for  the  currency  of  the  banks  of 
Boston,  New  York,  and  Philadelphia. 

Sir,  this  proposition  seems  to  me  to  lack 
every  element  of  wise  legislation.  Make  a  loan 
payable  in  irredeemable  currency,  and  pay  that 
in  its  depreciated  condition  to  our  contractors, 
soldiers,  and  creditors  generally  !  The  banks 
would  issue  unlimited  amounts  of  what  would 
become  trash,  and  buy  good  hard  money  bonds 
of  the  nation.  Was  there  ever  such  a  tempta¬ 
tion  to  swindle  ? 

He  further  proposes  to  issue  $200,000,000 
United  States  notes,  redeemable  in  coin  in  one 
year.  Does  not  the  gentleman  know  that  such 
notes  must  be  dishonored,  and  the  plighted 
faith  of  the  Government  broken  ?  No  one  be- 
ieves  that  we  could  then  pay  them,  and  it  would 
run  down  at  once.  If  we  are  to  use  suspended 


notes  to  pay  our  expenses,  -why  not  use  our 
own  ?  Are  they  not  as  safe  as  bank  notes  ? 
During  the  suspension  the  Government  would 
have  the  benefit  of  the  whole  circulation,  with¬ 
out  interest,  until  they  were  funded — that  is,  the 
interest  of  all  we  could  keep  out  would  accrue 
to  the  Government.  If  the  $150,000,000  were 
constantly  afloat,  it  would  be  a  loan  to  Govern¬ 
ment,  without  interest,  to  that  amount,  $9,000,- 
000  a  year.  But  if  we  used  the  suspended  pa¬ 
per  of  the  banks  our  bonds  would  bear  interest 
from  the  instant  we  got  their  notes.  A  good 
thing  for  suspended  banks.  Besides,  Govern¬ 
ment  would  have  the  benefit  of  all  the  lost  and 
destroyed  notes — a  considerable  item. 

Last  comes  the  substitute  of  the  minority  of 
the  committee.  I  look  upon  it  as  a  curiosity. 
It  proposes  to  issue  United  States  notes,  not  a 
legal  tender,  bearing  an  interest  of  three  and 
sixty-five  hundredths  per  cent.,  and  fundable 
into  seven  and  three-tenths  per  cent,  bonds,  but 
not  payable  on  demand,  but  at  the  pleasure  of 
the  United  States.  This  gives  one  and  three- 
tenths  per  cent,  higher  interest  than  our  loan, 
and  not  being  redeemable  on  demand,  would 
share  the  fate  of  all  non-specie-paying  notes 
not  a  legal  tender.  But  the  ingenious  minority 
have  invented  a  kind  of  currency  never  before 
known — a  circulation  bearing  interest.  Bonds 
or  note3  intended  for  investments  bear  interest, 
but  no  one  expects  they  will  be  used  as  cur¬ 
rency  ;  whether  in  the  shape  of  bonds  or  notes 
they  will  be  used  only  as  investments,  or  as 
pledges  on  which  to  procure  loans.  Suppose  a 
tailor,  shoemaker,  or  other  mechanic  or  labor¬ 
er,  were  to  take  one  of  these  bills,  and  in  a  week 
he  should  wish  to  use  it  in  market,  or  store,  or 
elsewhere,  he  must  sit  down  and  calculate  the 
interest  on  the  days  he  has  had  it  to  find  its  value. 
This  would  be  rather  inconvenient  in  a  frosty 
day.  This  currency  would  make  it  necessary 
for  every  man  to  carry  slate  and  pencil,  arith¬ 
metic  or  interest  table,  with  which  to  guage 
the  value  of  the  circulating  medium.  Gentle¬ 
men  must  see  how  ridiculous,  if  not  impracti¬ 
cable,  this  scheme  is. 

Here,  then,  in  a  few  words  lies  your  choice. 
Throw  bonds  at  six  or  seven  per  cent,  on  the 
market  between  this  and  December,  enough  to 
raise  at  least  $5  /0,000,000 — ajxmt  this  sum  is 
already  appropriated,  $557,000,000 — or  issue 
Uuited  States  notes,  not  redeemable  in  coin, 
but  fundable  in  specie-paying  bouds  at  twenty 


years ;  such  notes  either  to  be  made  a  legal 
tender,  or  to  take  their  chanoa  of  circulation 
by  the  voluntary  act  of  the  people. 

I  maintain  that  the  highest  sum  you  could 
sell  your  bonds  at  would  be  seventy-five  per 
cent.,  payable  in  currency  itself  at  a  discount. 
That  would  produce  a  loss  which  no  nation  or 
individual  doing  a  large  business  could  stand 
a  year. 

I  contend  that  I  have  shown  that  such  issue, 
without  being  made  money,  must  immediately 
depreciate,  and  would  go  on  from  bad  to 
worse.  I  flatter  myself  that  I  have  demon¬ 
strated,  both  from  reason  and  undoubted  au¬ 
thority,  that  such  notes,  made  a  legal  tender, 
and  not  issued  in  excess  of  the  demand,  will 
remain  at  par  and  pass  in  all  transactions, 
great  and  small,  at  the  full  value  of  their  face  ; 
that  we  shall  have  one  currency  for  all  sec¬ 
tions  of  the  country,  and  for  every  class  of 
people,  the  poor  as  well  as  the  rich. 

Some  gentlemen  are  as  much  frightened  as  if 
this  were  an  unwonted  apparition,  for  the  first 
time  prowling  forth  to  swallow  the  rich  creditor 
and  nurse  the  poor  debtor.  No  nation,  it  is 
said,  has  ever  tried  anything  like  it. 

Let  us  look  at  the  greatest  and  wisest  com¬ 
mercial  nation  in  the  world.*  In  1797  England 
was  struggling  for  existence  against  armed 
Europe.  She  needed  money,  as  we  do  now. 
She  found  it  impossible  to  borrow.  Gold  was 
likely  to  leave  the  country.  She  passed  a  law 
prohibiting  the  Bank  of'  England  from  paying 
coin  for  her  notes,  until  six  months  after  the 
final  ratification  of  peace.  That  law  remained 
in  force  till  1823.  It  is  said  she  did  not  make 
those  notes  a  legal  tender.  She  provided  that 
whoever  refused  to  take  them  for  a  debt  should 
have  no  remedy  for  its  collection  ;  and  that  a 
plea  of  such  tender  should  be  a  bar  to  the 
action.  This,  I  think,  is  the  most  stringent 
legal  tender ;  yet  those  notes  never  depreciated 
to  any  great  extent. 

Mr.  VALL  ANDIGHAM.  Did  they  not  de¬ 
preciate  twenty  per  cent  ? 

Mr.  STEVENS.  No,  sir;  at  no  time  after 
they  were  made  a  legal  tender  did  they  de¬ 
preciate  twenty  per  cent. 

Mr.  V  ALLAN  DIGIT  AM.  I  have  the  .author-  — , 
ity  of  Mr.  Canning,  which  I  think  is  quite  as  { 
good  as  that  of  McCulloch.  They  were  receiv¬ 
able  all  the  time  for  Government  dues. 

Mr.  STEVENS.  Yes,  sir;  but  they  still  ru 


7 


down  until  they  were  made  a  legal  tender,  and 
after  that  they  never  depreciated  a  single  dol¬ 
lar.  Had  they  been  made  an  absolute  tender, 
they  would  not  have  depreciated  a  farthing. 
But  nowr,  in  times  of  peace,  the  notes  of  the 
Bank  of  England  are  a  legal  tender  in  all  the 
vast  business  of  that  nation,  and  in  every  place, 
except  at  the  counter  of  the  bank.  What  else 
are  Bank  of  England  notes  than  bills  of  credit 
of  the  Government?  Her  whole  capital  con¬ 
sists  of  Government  securities,  and  her  issues 
are  based  on  that  alone.  Prussia  holds  the 
currency  in  paper  issuable  by  Government 
alone,  and  is  always  at  par.  What  becomes  of 
the  fine-spun  theories  of  the  opponents  of  this 
bill?  I  think  they  have  distressed  themselves 
very  unnecessarily;  and  yet  gentlemen  have 
shown  all  the  contortions,  if  not  the  inspira¬ 
tions,  of  the  Sibyl,  lest  Government  should 
make  these  notes  a  uniform  currency,  rather 
than  leave  them  to  be  regulated  by  sharks  and 
brokers.  I  look  upon  the  immediate  passage 
of  this  bill  as  essential  to  the  very  existence  of 
the  Government.  Reject  it,  and  the  financial 
credit  not  only  of  the  Government,  but  of  all 
the  great  interests  of  the  country,  will  be  pros¬ 
trated. 

Mr.  Chairman,  let  me  say  in  conclusion  that 
unless  this  bill  is  to  pass  with  the  legal  tender 
clause  in  it,  it  is  not  desirable  to  its  friends  or 
to  the  Administration  that  it  should  pass  at  all, 


and  those  who  think  as  I  do  will  have  to  vote 
against  it  if  it  shall  be  thus  mutilated  and 
emasculated.  If  it  is  to  be  defeated,  I  should 
be  glad  if  we  had  the  power  which  they  have 
in  the  British  Parliament — to  resign  our  places 
on  the  Committee  of  Way3  and  Means,  and 
leave  it  to  those  win* oppose  this  bill  to  mature 
some  other  measure.  So  far  as  I  am  concern¬ 
ed,  I  shall  be  modest  enough  not  to  attempt 
any  other  scheme.  The  Committee  of  Ways 
and  Means  have  labored  in  the  preparation  of 
this  measure  anxiously,  and  to  the  best  of  their 
poor  abilities.  We  are  not  infallible.  We  do 
not  come  near  it.  I  am  but  poorly  qualified 
for  anything  of  this  kind.  But  we  have  given 
it  our  most  anxious  consideration,  and  have 
consulted  those  whom  we  believed  to  be  best 
qualified  to  advise  us.  We  have  sought  to  har¬ 
monize  conflicting  views  in  the  substitute  which 
the  majority  of  the  committee  have  prepared, 
Eind  we  hope  it  will  pass.  We  believe  that  the 
credit  of  the  country  will  be  sustained  by  it; 
that  under  it  all  classes  will  be  paid  in  money 
which  all  classes  can  use,  and  that  it  will  con- 
fer  no  advantage  on  ihe  capitalist  over  the  poor 
laboring  man.  If  this  bill  shall  pass,  I  shall 
hail  it  as  the  most  auspicious  measure  of  this 
Congress;  if  it  should  fail,  the  result  will  be 
more  deplorable  than  any  disaster  which  could 
befall  us. 


WASHINGTON,  D.  C. 

SCAMMELL  A  CO.,  PRINTERS,  CORNER  OF  SECOND  STREET  A  INDIANA  ATENDE,  THIRD  FLOOR. 

1862. 


% 


r» '  •  v  < . 


.V..'  V  ' 

%.w  •  7 

•.  ■  - 

.  ri  > 

. 


« 

1  -  :  .  ■ 


■  ■ 

■ 


■ 

<  _  :  Vi  M  E  ! 


7  ;  ’t  sHfe  Vf;i 

' 


. 

' 

ti  M 


. 


. 

i  *?V  -  •  r-.--  *  ,■■■•'  -  :/'V  -;vv:, 


\ 


■  r.y.  : 

— —  t  -  \i*M  • 

_ 


- 

V  '  .  V'i-Jp*  ■/*» 


. 

...  ■ 

* 


■ . *T  ;•* i 

4  t  tv  ;  •'  <  4  '  <r '  '  . 


. 


W 


•  •  > 


f  »  •'  * 


